Social Security Monthly Benefit Amount Distribution

[jazz4cash]

The chart with gaps was pointing out what you need to getting from SSA to be in certain % ranges...10%, 20%, 30%...90%, 95% and 99%. All of the entries are $100 bands, and rather than having 55 rows, the author just showed the numbers that that crossed those

Except it's not 10,20,30%. There were some really odd choices that resulted in constructing a table with percentiles like 10.64 and 62.71.

 

[levindb]

Except it's not 10,20,30%. There were some really odd choices that resulted in constructing a table with percentiles like 10.64 and 62.71.

The actual chart on the SSA site increases by $100 in each row. That creates a % like 10.64%. The author just added the total recipients who had $X or less/ and divided by 53,624,664 and chose the first line that had 10% or higher in it. It would take some effort to create a new chart with the exact amount for 10.00%...and the author did not have the 53.6 million data points to get that done. The simple version is just grab the first line above 10% and then the next line that had 20%...and so on. It took me less than 5 minutes to copy the SSA data into excel and then duplicate the author's 12 line table.

 

[indiajust]

My default expectation for anything related to money, income, savings, investing,... is a power law distribution. I am shocked to find normal distributions. I understand why they are still used, tractability/ease of use, etc. But my spidey sense tingles when i see default assumptions or too normal distributions where none would be expected.

 

[Waynew]

DW and I both waited until we turned 70 recently, but I am still shocked by the distribution - I don't recall seeing it before. Of course we're paying maximum taxes on the benefit, but it's still surprising to me.

View attachment 63798

I started SS at age 62. I'm 75 now. $377K birds in my hand are worth many more than any in the bush. As we age we will have less reasons to spend on the things we want to accomplish. Furthermore, our dividend and options income is easily going to hit $300K in 2026, so Social Security is just enough to cover the basic living expenses. I've never thought of SS as a primary source of income. It is a very small layer in a very tall layer cake. I've seen far too many friends die at age 65. We never (rarely) know our expiration date.

 

[meleana]

Im not a liberal person, but I am waaay to the left on this distribution curve. But it would still be way left if I waited until 70 as it wouldn't even then broach $1000. I recently filled out the paperwork and the max 22% withholding still isnt big enough to cover the taxes. But I will gladly take my ~$450 after taxes (and still owe a bit more) while I can. As I bet if “changes” are to be made with the upcoming SS shortfall, I will be at the front of the line to experience an adverse outcome….Another SS lesson I learned filling this out you dont get the check on your birthday. The first one for me isnt until 2 months after my birthday. They deliberately stall 2 months to get me 2 months closer to death to save money!

You should get your first check the month after your birthday month. Unless you filed late or something.

 

[2retireearly]

to be a decent curve you need to either project what those taking starting at 62,63,64,65 or 66 would be at 67, or those taking at 68,69 or 70, discount what it would have been at 67. then all are compared to one age: 67...comparing 62 or 63 or 64....etc...or 70, all to each other is meaningless.

 

[Midpack]

Not altogether surprising, but interesting how bifurcated SS claiming age is, probably three peaks if they extended the horizontal axis e.g. 62, FRA, 70? Also looks like people are getting smarter.

I had a chart that plotted the ages most people took SS versus the age it would have been most beneficial - wish I could find it again. It clearly showed more people should wait than do, and yes it acknowledged those who had no choice but to take it as early as possible.

Most of my cohorts took SS at 62 without no thought whatsoever - one of them tells everyone the SS breakeven age is 86, pure hogwash to justify his "choice." Same guys who complain about how small their monthly SS checks are. They looked at me like I had two heads 2+ years ago when I told them DW and I waited until 70. It's astonishing what two 70 yo's can take in if they wait...

 

[gauss]

to be a decent curve you need to either project what those taking starting at 62,63,64,65 or 66 would be at 67, or those taking at 68,69 or 70, discount what it would have been at 67. then all are compared to one age: 67...comparing 62 or 63 or 64....etc...or 70, all to each other is meaningless.

Agreed
I would not expect normal in that you have natural claiming ages at 62, FRA, and 70.

If we could somehow untangle those effects in 3 separate curves rather than aggregated together, perhaps these 3 component distributions would be more normal and less flat-topped.

-gauss

 

[Time2]

They deliberately stall 2 months to get me 2 months closer to death to save money!

Sigh.

 

[Time2]

I had a chart that plotted the ages most people took SS versus the age it would have been most beneficial - wish I could find it again.

AI found it, but I had to tell it to look harder!
From here, https://maringroup.com/wp-content/uploads/2019/06/Retirement-Solution-Hiding-in-Plain-Sight.pdf >60% down page.

 

[Perryinva]

I was also surprised at how few people wait to even FRA, much less age 70. I knew it was severely skewed, just not THAT skewed. So basically 5% or less collects $4k a month? I agree, it would be interesting to see an age related chart per year, as to what the PIA distributions were. If only 5% even HAD PIAs that allowed $4 or more, then it is indeed just a normal distribution that highlights that in general higher earners are better with their retirement planning, and so can afford to wait, it health and life makes sense.

While even with a relatively small “other taxable income” amount, a tax free pair of checks totaling $120k/year is certainly unusual, even more so would be the couple with both having maximum earnings for 35 years each to even be eligible for that high an amount, and NOT have a substantial retirement nest egg. How much of that nest egg throws off taxable income would be an interesting study.

Certainly the average worker never made maximum PIA wages for 35 years.

 

[jazz4cash]

I think I should have claimed at FRA instead of waiting, though. I was always in the take when needed camp. Once I got to FRA it was a subconscious decision to delay month by month. The few I've mentioned it to are stunned or think I have a loose screw.

 

[TheWizard]

I think I should have claimed at FRA instead of waiting, though. I was always in the take when needed camp. Once I got to FRA it was a subconscious decision to delay month by month. The few I've mentioned it to are stunned or think I have a loose screw.

I don't think most of us care about what others may think.
Am I right?

 

[jazz4cash]

I don't think most of us care about what others may think.
Am I right?

I mentioned it because it seems to be consistent with many of these charts but some are folks that I care about in general so yeah it matters if they are making a poor choice for their situation.

 

[TheWizard]

I mentioned it because it seems to be consistent with many of these charts but some are folks that I care about in general so yeah it matters if they are making a poor choice for their situation.

Perhaps.
And while I know a bunch of people through various circumstances, I don't really presume to know anything significant about their personal situation, financial, health related or otherwise...

 

[bada bing]

I think I should have claimed at FRA instead of waiting, though. I was always in the take when needed camp. Once I got to FRA it was a subconscious decision to delay month by month. The few I've mentioned it to are stunned or think I have a loose screw.

I'm similar. Still deferring at 67.5. So far it is an unconscious choice because so far there's been no fiscal reason to consider starting. If I make it to age 70 before claiming I'll be at the furthest right tail of the benefit distribution curve.

My take is that there are only two real choices and the correct one won't be known until after break even age. Either as early as possible or age 70, depending on your expiration date. I sort of like betting I'll beat the averages, but we'll see.

 

[COcheesehead]

In light of not having a readily apparent fix, I wonder how the impending “depletion of the trust” will motivate others to take it sooner rather than later. Not saying it’s right or wrong, but people tend to let fear drive their decisions.

 

[Car-Guy]

Most of my cohorts took SS at 62 without no thought whatsoever - one of them tells everyone the SS breakeven age is 86, pure hogwash to justify his "choice." Same guys who complain about how small their monthly SS checks are. They looked at me like I had two heads 2+ years ago when I told them DW and I waited until 70. It's astonishing what two 70 yo's can take in if they wait...

OTOH, I can't count how many friends I've had and coworkers I've known that never made it to thier 70's. A few passed away in the late 50's and many more in their 60's. Many never got any SS benefits. Most/many (not all) passed away from various types of cancer. My BIL passed at ~65 from pracreatic cancer. I remember him telling me he filed for SS the day he found out he had cancer saying, might as well get something.

 

[Koolau]

I started SS at age 62. I'm 75 now. $377K birds in my hand are worth many more than any in the bush. As we age we will have less reasons to spend on the things we want to accomplish. Furthermore, our dividend and options income is easily going to hit $300K in 2026, so Social Security is just enough to cover the basic living expenses. I've never thought of SS as a primary source of income. It is a very small layer in a very tall layer cake. I've seen far too many friends die at age 65. We never (rarely) know our expiration date.

Dare I say it? SS is Icing on the cake for many people.



Of course, for others, it's their main source of income in retirement. It certainly was for my parents. My mom passed in 2000 and her SS was less that $1100 after dad passed. She did okay until she needed LTC.

 

[Midpack]

OTOH, I can't count how many friends I've had and coworkers I've known that never made it to thier 70's. A few passed away in the late 50's and many more in their 60's. Many never got any SS benefits. Most/many (not all) passed away from various types of cancer. My BIL passed at ~65 from pracreatic cancer. I remember him telling me he filed for SS the day he found out he had cancer saying, might as well get something.

That’s anecdotal. While there are certainly people who can afford to wait and know they’re unlikely to beat the odds, e.g. health issues or family history, the data is readily available (post #35 and many others) for anyone who chooses to make a data based choice…

 

[Midpack]

AI found it, but I had to tell it to look harder!
From here, https://maringroup.com/wp-content/uploads/2019/06/Retirement-Solution-Hiding-in-Plain-Sight.pdf >60% down page.
View attachment 64201

Thanks, that’s the one!

 

[indiajust]

A co-worker in my past carried a genetic risk across his entire family. No one in 3 generations had lived to 55. Yet he was forced to pay. I am tempted to do the pointless task of calculating what my 55k in payments would look like in todays dollars with my now easily calculated returns over the years. Perhaps I could have retired 25 years ago, instead of just 20.